Banks 'will pull out of Britain' unless Theresa May sorts out post-Brexit plan

The chairman of RBS has warned that banks could pull out of Britain unless Theresa May secures a post-Brexit transition plan.

Sir Howard Davies said American and Japanese banks are very concerned at the prospect of a hard Brexit and are drawing up contingency plans.

He urged the Prime Minister to offer the City some reassurance and certainty by negotiating a transitional deal which will allow firms based in Britain to continue to be able to operate in the rest of the EU.

He told ITV's Peston On Sunday show that jobs could be lost to Europe and to Ireland.

He said: "I think it is damaging if we don't get a transitional deal because I think you will then see banks and financial institutions making decisions on the basis of uncertainty.

"They will not wait because they have to make a decision which will allow them to be, to continue to function in the event of a hard Brexit if that's a possibility.

"So they will not sit back, they are currently making contingency plans and once you've got a contingency plan – hey, there is a risk you might implement it one day.

Brexit Concerns

Brexit Concerns

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Raymond McCord holds up his newly issued Irish passport alongside his British passport outside the High Court in Belfast following a judges dismissal of the UK's first legal challenges to Brexit

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SDLP leader Colum Eastwood leaving the High Court in Belfast following a judges dismissal of the UK's first legal challenges to Brexit

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Migrants with luggage walk past a graffiti on a wall as they leave the 'Jungle' migrant camp, as part of a major three-day operation planned to clear the camp in Calais

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Migrants leave messages on their tents in the Jungle migrant camp

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The Adventist Development and Relief Agency (Adra) which distributes approximately 700 meals daily in the northern Paris camp states that it is noticing a spike in new migrant arrivals this week, potentially linked the the Calais 'jungle' camp closure - with around 1000 meals distributed today

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Migrant workers pick apples at Stocks Farm in Suckley, Britain

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Many farmers across the country are voicing concerns that Brexit could be a dangerous step into the
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Bank of England governor Mark Carney who said the long-term outlook for the UK economy is positive, but growth was slowing in the wake of the Brexit vote

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The Dow Jones industrial average closed down over 600 points on the news with markets around the globe pluninging

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Immigration officers deal with each member of the public seeking entry into the United Kingdom but on average, 10 a day are refused entry at this London airport and between 2008 and 2009, 33,100 people were detained at the airport for mainly passport irregularities

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A number of global investment giants have threatened to move their European operations out of London if Brexit proves to have a negative impact on their businesses

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Following the possibility of a Brexit the UK would be released from its renewable energy targets under the EU Renewable Energy Directive and from EU state aid restrictions, potentially giving the government more freedom both in the design and phasing out of renewable energy support regimes

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A woman looking at a chart showing the drop in the pound (Sterling) against the US Dollar in London after Britain voted to leave the EU

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Young protesters outside the Houses of Parliament in Westminster, to protest against the United Kingdom's decision to leave the EU following the referendum

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Applications from Northern Ireland citizens for Irish Passports has soared to a record high after the UK Voted in favour of Leaving the EU

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NFU Vice President Minette Batters with Secretary of State, Andrea Leadsome at the National Farmers Union (NFU) took machinery, produce, farmers and staff to Westminster to encourage Members of Parliament to back British farming, post Brexit

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The latest reports released by the UK Cabinet Office warn that expats would lose a range of specific rights to live, to work and to access pensions, healthcare and public services. The same reports added that UK citizens abroad would not be able to assume that these rights will be guaranteed in the future

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A British resident living in Spain asks questions during an informative Brexit talk by the "Brexpats in Spain" group, about Spanish legal issues to become Spanish citizens, at the town hall in Benalmadena, Spain

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The collapse of Great Britain appears to have been greatly exaggerated given the late summer crowds visiting city museums, hotels, and other important tourist attractions

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The U.K. should maintain European Union regulations covering everything from working hours to chemicals until after the government sets out its plans for Brexit, said British manufacturers anxious to avoid a policy vacuum and safeguard access to their biggest export market

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"And therefore I think that it is quite urgent."

Financial firms fear they could lose membership of the single market and their passporting rights, which allow companies in the UK to operate across the European Economic Area.

Sir Howard said the Government does not need to detail its full negotiating position, but needs to reassure the City so Britain does not encounter a "jerky and sudden" departure from the EU.

"So what we are particularly focused on in the City at the moment is to try to get an understanding that actually allowing a cliff edge departure from Brexit would be damaging for everybody, because about three quarters of all European capital transactions take place in London – often by French banks or German banks etc – but they take place in London.

"If you suddenly broke that off it would be destabilising for the whole of the European financial markets.

"So what we need is a transitional arrangement, as the Article 50 process starts, so we can say 'look, here is the way in which things are going to work in the medium term'.

"In the long term, of course, I think there will be some movement of activity."

Sir Howard said he is optimistic transitional arrangements can be drawn up as it is in the interests of the remaining EU states as well as Britain.

His warning came as Boris Johnson snubbed an emergency EU foreign ministers' meeting called to discuss Donald Trump's shock US election victory.

Foreign Secretary Mr Johnson, who branded vocal European concern about the US election result as a "whinge-o-rama", was dismissive of the need for a special EU meeting.